What to Watch: Beauty M&A Stays Strong

Forecasting beauty M&A in 2018 is a cinch — there will be more deals. The dynamics remain auspicious: Large beauty players will look for growth by acquiring smaller companies. An influx of beauty newcomers competing for deals will likely keep prices high. A lack of mid-size targets means deals are likely to be on the large or small side. “While 2017 was one of the greatest vintages ever in terms of the quality of the assets, 2018 still seems to be a pretty prodigious year,” said Andrew Shore, managing director at Moelis & Co. “We’re just at the tip of the iceberg…I think the pendulum has begun to shift to skin and hair.” “The beauty M&A environment will continue to be robust in 2018,” agreed Vennette Ho, managing director at Financo. “Even beyond the typical brand acquisition, we expect to see new entrants to the industry, big companies making small investments and folks playing all along the beauty value chain — from manufacturers to digital agencies to technology to retailers.” Companies expected to come up for sale or complete an investment transaction in 2018 include Arbonne, Array Marketing, Cover FX, Not Your Mother’s, Derma E, Ouai, Farmacy, Milani and This Works, according to industry

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